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Unbundling fees for financial services – e.g., separating payments for third-party research from commissions for trade execution – is in the long-term best interests of institutional asset owners**: it can increase both transparency and alignment with intermediaries, such as external asset managers. Yet how unbundling takes place can be a major determinant of when its benefits for asset owners are realized…

Under MiFID II, asset managers need to begin the process of delivering MiFID II client research budgets in 2H 2017.
Given the importance of this exercise, and the rapidly shrinking timeframe, asset managers need to be devising research
budget policies and related client communication strategies now, as this has become a competitive issue that will soon
outweigh the regulatory considerations.

Recent FCA guidance on the implementation of MiFID II is the ‘starting gun’ for global research process transformation. The asset manager’s research budgeting process, and the way in which it is communicated to asset owners, will become a major competitive battleground for asset managers. Here’s what asset managers will have to consider when constructing strategy-level research budgets.

Strategy Level Research Budgets – Firms must document why they have grouped portfolios together to create the strategy budgets.Asset owners must be informed of the quantum of their research budget in advance of the research services being purchased/delivered. Click the headline for more.

Fiduciary capitalists, such as leading pension plans and endowments, can be influential in aligning the interests of asset management firms with their clients. The authors make recommendations to guide asset managers and asset owners through a complex information market during this time of dramatic change.